THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


i  \ 
o 


CCCCXLIX* 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


BY  F.  A.  HALSEY,  SHERBROOKE,  P.  Q.,  CANADA. 


(Member  of  the  Society.) 


This  pian  has  been  devised  in  order  to  overcome  the  objections 
inherent  in  the  other  plans  in  general  use.  It  accomplishes  this 
purpose  without  introducing  corresponding  objections  of  its  own. 
Its  merits  are  best  shown  by  contrasting  it  with  the  other  plans 
in  common  use,  and  it  wull  be  discussed  with  them  in  the  following 
order  : 

I.  The  day's-work  p^tn. 

II.  The  piece-work  plan. 

III.  The  profit-sharing  plan. 

IY.  The  premium  plan. 

'  -  ’  i  •  V. 

I.  THE  DAY’S-WORK  PLAN. 

Under  this  method  the  workman  is  paid  for  and  in  proportion 
to  the  time  spent  upon  his  work.  The  ol  Sections  to  the  plan  are 
well  known.  Analyzed  to  their  final  cause,  they  spring  from  the 
fact  that  any  increase  of  effort  by  the  workman  redounds  solely 
to  the  benefit  of  the  employer,  the  workman  having  no  share  in 
the  consequent  increase  of  production.  He  has  consequently  no 
inducement  to  exert  himself  and  does  not  exert  liimsefn  Under 
this  system,  especially  in  a  manufacturing  business,  matters 
naturally  settle  down  to  an  easy-going  pace,  in  which  the  work¬ 
men  have  little  interest  in  their  work,  and  the  employer  pays 
extravagantly  for  his  product. 


II.  THE  PIECE-WORK  PLAN. 


Under  this  plan  the  workman  is  paid  for  and  in  proportion  to  the 
amount  of  work  done.  It  is  a  natural  attempt  to  overcome  the 
objections  to  the  day’s-work  plan.  It  has  the  appearance  of  being 


*  Presented  at  the  Providence  meeting  (1891)  of  the  American  Society  of 
Mechanical  Engineers,  uud  forming  part  of  Volume  XII.  of  flie  Transactions, 


J&6  THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 

just  and  of  being  based  upon  correct  principles.  Nevertheless, 
extended  inquiry  lias  convinced  the  writer  that  it  seldom  works 
smoothly,  and  never  produces  the  results  which  it  should. 

An  employer  who  has  become  dissatisfied  with  the  results  of 
the  day’s-work  plan,  and  decides  to  adopt  piece  work,  usually 
reasons  that  work  which  is  costing  in  wages,  say  one  dollar  per 
piece,  could,  with  some  extra  effort,  be  produced  on  the  existing 
scale  of  wages  for  about  eighty  cents ;  and  desiring  to  give  the 
workman  some  inducement  offers  him  ninety  cents  per  piece, 
thereby  dividing  the  expected  saving  with  him.  The  trouble  be¬ 
gins  at  once.  The  workman  does  not  believe  that  he  can  “  make 
wages  ”  at  the  rate  offered,  and  objects.  He  is,  however,  finally 
induced  or  compelled  to  try  it,  and  immediately  proceeds  to  as¬ 
tonish  himself  and  all  others  by  increasing  his  output  far  beyond 
the  expected  25$.  His  earnings  increase  with  startling  rapidity, 
hut  the  cost  of  the  work  remains,  where  set ,  at  ninety  cents  per  piece , 
and  the  employer  soon  finds  that  instead  of  a  substantially  equal 
division  of  the  savings  he  is  getting  but  little,  and  the  workman 
practically  all  of  it.  He  accordingly  proceeds  to  cut  the  piece 
price,  and  the  fatal  defect  of  the  system  appears.  This  cut  is  in 
appearance  and  in  fact  an  announcement  to  the  workman  that  his 
earnings  will  not  be  allowed  to  exceed  a  certain  amount,  and  that 
should  he  push  them  above  that  amount  he  will  be  met  with  another 
cut.  Cutting  the  piece  price  is  simply  killing  the  goose  that  lays 
the  golden  egg.  Nevertheless,  the  goose  must  be  killed.  AVith-  4 
out  it  the  employer  will  continue  to  pay  extravagantly  for  his  work ; 
with  it  he  will  stifle  the  rising  ambition  of  his  men.  The  diffi¬ 
culties  of  the  day’s-work  and  piece-work  plans  are  thus  seen  to 
be  the  exact  antitheses  of  one  another.  Analyzed  to  their  final 
cause,  the  difficulties  with  the  piece-work  plan  spring  from  the 
Cact  that  the  piece  price  once  set,  any  increase  of  effort  by  the 
workman  redounds  to  his  own  benefit  alone — the  employer  having 
no  share  in  the  consequent  saving  of  time.  To  obtain  a  share  he 
cuts  the  piece  price,  with  the  consequences  stated.  Under  this 
system  matters  gradually  settle  down  as  before  to  an  easy-going 
pace  in  which  the  workmen  approach  the  limit  of  wages  as  nearly 
as  they  consider  prudent.  Their  earnings  are  somewhat  more 
and  the  cost  of  the  work  is  somewhat  less  than  under  the  day’s- 
work  plan,  but  there  is  no  more  spirit  of  progress  than  under  the 
older  method.  The  employer  is  constantly  on  the  lookout  for  a 
chance  to  cut  the  piece  prices,  that  being  his  only  method  of 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


757 


rH 

'/]  z 
/ 

reducing  cost ;  and  the  men  are  constantly  on  the  lookout  to 
defeat  the  employer’s  well  understood  plan,  knowing,  as  they  do, 
that  any  one  who  is  so  unwise  or  so  unfortunate  as  to  do  an 

(  increased  amount  of  work  will  be  in  effect  punished  for  it  by 

having  his  piece  price  cut  and  himself  thereby  compelled  to  work 
i  harder  in  the  future  for  the  old  amount  of  income.  The  system 
makes  the  interests  of  the  employer  and  employee  antagonistic, 
and  lienee  of  concerted  effort  toward  a  progressive  reduction  of 
cost  there  is  none.  This  I  believe  to  be  the  usual  and  natural 
history  of  the  piece-work  plan.  I  know  it  to  represent  the  situa¬ 
tion  in  some  of  the  foremost  machine  shops  of  the  country.  An 
1  additional  objection  to  the  plan  grows  out  of  the  fact  that  it 

requires  a  knowledge  and  record  of  the  cost  of  each  piece  of  a 

complicated  machine,  and  oftentimes  of  each  operation  on  each 
piece.  This  limits  its  range  of  application  to  products  which  are 
produced  in  considerable  quantities. 

III.  THE  PROFIT-SHARING  PLAN. 

This  plan  was  originally  devised  in  the  effort  to  avoid  the  ob¬ 
jections  to  the  two  former  plans.  Under  it,  in  addition  to  regular 
j  wages,  the  employees  are  offered  a  certain  percentage  of  the  final 
profits  of  the  business.  It  thus  divides  the'  savings  due  to  in¬ 
creased  production  between  employer  and  employee,  and  at  first 
I  sight  appears  to  meet  the  difficulties  of  the  plans  thus  far  dis¬ 
cussed  ;  but,  nevertheless,  on  analysis,  will  be  found  to  be  as 
;  defective  as  they,  both  in  principle  and  application.  The  leading 
objections  to  the  plan  are  the  following  : 

Firs/.  The  workmen  are  given  a  share  in  what  they  do  not  earn. 
Increased  profits  may  arise  from  more  systematic  shop  manage¬ 
ment,  decreased  expenses  of  the  sales  department,  or  many  other 
causes  with  which  the  workmen  have  nothing  to  do.  Anything 
given  them  from  such  sources  becomes  simply  a  gift,  the  result  of 
which  is  wholly  pernicious — in  fact  the  entire  system  savors  of 
patronage  and  paternalism. 

Second.  The  workmen  share,  regardless  of  individual  deserts. 

|  An  active,  energetic  workman  cannot  have  the  same  incentive  to 
1  increased  exertion  under  a  system  which  divides  the  results  of 
his  efforts  among  a  dozen  lazy  fellows  at  his  side  that  he  would 
I  have  under  one  in  which  his  earnings  depend  on  himself  alone ; 
on  the  other  hand,  a  lazy  workman  would  naturally  consider  it 
much  easier  to  take  his  portion  of  the  earnings  of  his  fellows  than 

I  ; 


758 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


to  exert  himself  and  then  divide  the  results  with  all  the  others  of 
the  force. 

Third.  The  promised  rewards  are  remote.  The  incentive  can¬ 
not  be  as  great  under  a  system  which  computes  and  divides  the 
savings  once  or  twice  a  year  as  under  one  which  pays  out  the 
extra  earnings  week  by  week. 

Fourth.  The  plan  makes  no  provision  for  bad  years.  We  hear 
much  of  profit  sharing,  but  nothing  of  loss  sharing.  And  yet  the 
workman  cannot  expect  to  share  the  profits  while  others  assume 
the  losses ;  and,  per  contra,  those  who  assume  the  risk  of  loss  can¬ 
not  be  expected  to  share  the  profits  with  those  who  have  nothing 
at  stake. 

Fifth.  The  workmen  have  no  means  of  knowing  if  the  agree¬ 
ment  is  carried  out.  With  their  exaggerated  ideas  of  the  profits 
of  business,  the  results  must  be  in  many  cases  disappointingly 
small,  and  they  will  doubt  the  honesty  of  the  division.  What  is 
to  be  done  in  such  a  case?  Invite  the  workmen  to  appoint  a 
committee  to  examine  the  books,  and.  report  ?  Most  employers 
will  demur  at  this,  and  yet  without  it  the  employees  can  have 
no  assurance  of  good  faith  ;  and  were  it  done,  what  good  could 
result?  How  many  workmen’s  committees  are  there  who  are 
sufficiently  versed  in  modern  accounts  to  form  any  idea  of  the  pro¬ 
ceeds  of  the  year’s  business  from  an  examination  of  the  books  ?  In 
this  light  the  profit-sharing  plan  is  seen  to  be  an  agreement  be¬ 
tween  two  parties,  the  first  of  whom  has  every  temptation  and 
opportunity  to  cheat  the  second,  while  the  second  has  no  means 
of  knowing  if  he  has  been  cheated,  and  no  redress  in  any  case. 
In  the  present  state  of  human  nature  this  cannot  be  expected  to 
be  satisfactory  to  the  second  party.  The  fact  that  the  plan  has 
worked  with  apparent  success  in  some  instances  and  for  consider¬ 
able  periods  of  time  proves  nothing.  The  most  disastrous  boiler 
explosions  and  bridge  failures  have  been  preceded  by  long  periods 
of  apparent  safety.  Even  the  Conemaugh  dam  held  water  for 
many  years.  It  is  a  truism  that  the  most  rickety  and  unsafe  devices 
often  serve  their  purpose  for  long  periods.  At  the  beginning  the 
workmen  look  on  the  amount  received  at  the  annual  division  as  a 
bonus,  and  anything  is  better  than  nothing  ;  but  later  on  they  will 
look  on  it  as  theirs  by  right  of  having  earned  it,  and  the  above 
situation  is  certain  to  arise.  The  fact  is,  that  the  profit-sharing 
plan  is  wrong  in  principle,  and  cannot  be  in  any  large  sense  a 
solution  of  the  wages  problem. 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


759 


IV.  THE  PREMIUM  PLAN. 

Taking  up  now  the  subject  proper  of  this  paper,  it  aims  at  a 
j  division  of  the  savings  due  to  increased  production  between  the 
[  employer  and  employee,  but  by  a  direct  method  instead  of  the 
I  circuitous  one  of  the  profit-sharing  plan.  The  plan  assumes  two 
slightly  different  forms,  according  to  the  nature  of  the  work ;  one 
form  being  suited  to  work  produced  in  such  quantities  as  to  be 
reducible  to  a  strictly  manufacturing  basis,  and  the  other  form 
to  the  more  limited  production  of  average  practice.  In  both 
forms  the  essential  principle  is  the  same,  as  follows :  The  time 
required  to  do  a  given  piece  of  work  is  determined  from  previous 
experience,  and  the  workman,  in  addition  to  his  usual  daily  wages, 
is  offered  a  premium  for  every  hour  by  which  he  reduces  that 
time  on  future  work,  the  amount  of  the  premium  being  less  than 
I  his  rate  of  wages.  Making  the  hourly  premium  less  than  the 
hourly  wages  is  the  foundation  stone  on  which  rest  all  the  merits 
of  the  system,  since  by  it  if  an  hour  is  saved  on  a  given  product 
the  cost  of  the  work  is  less  and  the  earnings  of  the  workman  are 
greater  than  if  the  hour  is  not  saved,  the  workman  being  in 
effect  paid  for  saving  time.  Assume  a  case  in  detail :  Under  the 
old  plan  a  piece  of  work  requires  ten  hours  for  its  production, 
and  the  wages  paid  is  thirty  cents  per  hour.  Under  the  new  plan 
a  premium  of  ten  cents  is  offered  the  workman  for  each  hour 
which  he  saves  over  the  ten  previously  required.  If  the  time  be 
reduced  successively  to  five  hours  the  results  will  be  as  follows : 


1 

2 

3 

4 

5 

Time  consumed. 

Wages 
per  piece. 

Premium. 

Total  cost  of  work 
=  col.  2  +  col.  3. 

Workman’s 
earnings  per 
hour  = 

col.  4  -f-  col.  1. 

Hours. 

$ 

$ 

$ 

$ 

10 

3.00 

0 

3.00 

.30 

9 

2.70 

.10 

2.80 

.311 

8 

2.40 

.20 

2.60 

.325 

7 

2.10 

.30 

2.40 

.343 

6 

1.80 

.40 

2.20 

.366 

5 

1.50 

.50 

2.00 

.40 

This  table  illustrates  the  manner  in  which  the  cost  of  the 
work  diminishes  and  the  workman’s  earnings  increase  together 
until,  to  cite  the  extreme  case  of  the  last  line,  if  the  output  be 


760 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


doubled,  the  wages  paid  per  piece  will  be  reduced  33^#,  but 
the  workman’s  earnings  per  hour  will  be  increased  33£$.  Were 
the  premium  less  than  ten  cents  per  hour,  the  reduction  in 
cost  for  each  hour  saved  would  be  greater,  and  the  ’work¬ 
man’s  earnings  less.  On  the  other  hand,  the  workman  would 
have  a  smaller  incentive,  and  the  time  would  not  be  reduced 
so  much.  The  output  would  be  less,  and  the  net  result  might 
be  worse  for  both  employer  and  employee.  This  raises  the 
inevitable  question :  What  should  be  the  rate  of  the  premium  ? 
Nothing  but  good  sense  and  judgment  can  decide  in  any  case. 
In  certain  classes  of  work  an  increase  of  production  is  accom¬ 
panied  with  a  proportionate  increase  of  muscular  exertion,  and 
if  the  work  is  already  laborious  a  liberal  premium  will  be  re¬ 
quired  to  produce  results.  In  other  classes  of  work  increased 
production  requires  only  increased  attention  to  speeds  and  feeds 
with  an  increase  of  manual  dexterity  and  an  avoidance  of  lost 
time.  In  such  cases  a  more  moderate  premium  will  suffice.  Any 
attempt,  however,  on  the  part  of  the  employer  to  be  greedy  and 
squeeze  the  lemon  too  dry  will  defeat  its  own  object,  since  if  a 
trifling  premium  be  offered,  the  workman  will  not  consider  it  worth 
while  to  exert  himself  for  so  small  a  reward,  and  the  expected 
increase  of  output  will  not  take  place.  On  the  other  hand,  if.the 
premium  offered  be  too  high,  the  employer  will  simply  pay  niore 
than  necessary  for  his  work,  though  less  than  he  has  been  paying. 
If  the  rate  of  premium  is  decided  upon  judiciously,  it  may  and 
should  be  made  permanent.  No  cutting  down  of  the  rate  should 
ever  be  made  unless,  indeed,  improved  processes  destroy  the 
significance  of  the  first  time  base.  Every  increase  of  earnings  is 
necessarily  accompanied  by  a  corresponding  decrease  of  cost, 
and  if  the  premium  be  such  as  to  give  these  a  satisfactory  rela¬ 
tion,  the  workman  may  be  assured  that  there  will  be  no  limit  set 
to  his  earnings ;  that  the  greater  they  are  the  more  satisfactory 
they  will  be  to  the  employer.  The  importance  of  this  cannot  be 
too  strongly  insisted  upon.  If  the  premiums  be  cut  the  workmen 
will  rightly  understand  it  to  mean,  as  under  the  piece-work  plan, 
that  their  earnings  are  not  to  be  permitted  to  pass  a  certain  limit, 
and  that  too  much  exertion  is  unsafe.  The  very  purpose  of  the 
plan  is  to  avoid  this  by  so  dividing  the  savings  between  employer 
and  employee  as  to  remove  the  necessity  for  cutting  the  rate,  and 
hence  enable  the  workman’s  earnings  to  be  limited  only  by  his 
own  ability  and  activity.  The  baneful  feature  of  the  piece-work 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


761 


plan  is  thus  completely  obviated,  and  instead  of  periodical  cuts 
with  their  resulting  ill-feeling,  the  premiums  lead  the  workman 
to  greater  and  greater  effort,  resulting  in  a  constant  increase  of 
output,  decrease  of  cost,  and  increase  of  earnings. 

The  broad-minded  employer  will  not  fail  to  recognize  that  his 
own  gain  from  the  system  comes  largely  from  the  increased  pro¬ 
duction  from  a  given  plant,  since  not  only  does  the  system  reduce 
the  wages  cost  of  the  piece  of  work  in  hand,  but  in  so  doing  it 
increases  the  capacity  of  the  plant  for  other  work  to  follow.  The 
advantages  from  this  source  are  so  great  as  to  render  unnecessary 
any  refined  hair  splitting  as  to  the  rate  of  the  premium. 

Such  is  the  premium  plan,  and  the  writer  confidently  predicts 
that  the  more  it  is  studied  the  more  perfect  will  appear  its  adap¬ 
tation  to  the  requirements  of  industrial  enterprise  and  human 
nature.  Surely,  a  system  which  increases  output,  decreases  cost, 
and  increases  workman’s  earnings  simultaneously,  without  friction, 
and  by  the  silent  force  of  its  appeal  to  every  man’s  desire  for  a 
larger  income,  is  wrorthy  of  attention.  In  addition  to  the  com¬ 
manding  features  noted  it  has  others  of  lesser  note.  The  transi¬ 
tion  to  it  from  the  day’s-work  plan  is  easy  and  natural.  It  does 
not  involve  a  reorganization  of  the  system  of  bookkeeping,  but 
only  an  addition,  and  a  small  one,  to  the  existing  system.  No  op¬ 
position  to  it,  organized  or  otherwise,  is  possible,  since  there  is 
nothing  compulsory  about  it,  and  nothing  tangible  to  oppose.  It 
is  simply  an  offer  to  gratify  one  of  the  strongest  passions  of 
human  nature,  and  the  difficulty  often  found  in  introducing  piece 
work  cannot  occur  with  this. 

In  carrying  out  the  plan  in  connection  with  work  which  has 
been  reduced  to  a  manufacturing  basis,  the  writer  finds  the  fol¬ 
lowing  form  of  time  ticket  convenient : 


Time  Ticket 


762 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


Machine  set  by . . .  Time . . hours . 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


763 


This  ticket  is  issued  by  the  foreman,  the  blanks  at  the  top 
being  filled  up  by  him.  If  desired  as  a  check  he  punches  a  hole  on 
the  line,  indicating  the  hour  when  the  work  is  given  out,  repeating 
the  same  when  the  work  and  ticket  are  returned.  The  record  of 
the  time  is  kept  by  drawing  a  line  between  the  various  hour  marks, 
an  operation  which  the  most  illiterate  can  perform.*  The  ticket 
provides  for  several  days’  work,  and  is  not  returned  until  the  work 
is  completed,  when  it  contains  the  record  of  the  entire  job.f  On 
the  back  of  the  ticket  is  printed  the  following : 

“  According  to  previous  experience  this  work  should  require  .  .  . 
hours.  If  completed  in  less  time  than  that  a  premium  of  .  .  .  cents 
will  be  paid  for  each  hour  saved.” 

When  the  ticket  is  returned,  a  comparison  of  the  back  with  the 
front  shows  the  premium  earned.  This  is  entered  opposite  the 
workman’s  name,  in  a  book  kept  for  the  purpose,  which  is  a  com¬ 
panion  to  the  usual  time  book  or  pay  roll.  On  pay  day  the  accrued 
premiums  are  paid  to  each  workman  along  with  the  regular  wages. 
The  cost  book  is  written  up  from  the  ticket  in  the  usual  way, 
except  that  as  the  ticket  usually  contains  the  record  of  several 
days’  work,  the  labor  of  keeping  the  cost  book  is  much  abridged. 

On  work  which,  while  produced  as  a  regular  product,  is  still  not 
produced  in  sufficient  quantity  to  justify  recording  the  cost  of 
each  part,  the  premium  offer  is  made  to  the  group  of  men  who 
carry  out  the  work.  The  proposition  is  made  as  a  posted  notice, 
or  otherwise  in  the  following  form : 

“  According  to  previous  experience  this  work  should  require  .  .  . 
hours.  If  completed  in  less  time  than  that  a  premium  of  .  .  .  cents 
per  hour  saved  will  be  divided  among  those  working  on  the  ma¬ 
chine,  division  to  be  in  proportion  to  time  spent  on  the  work.” 

In  this  form  the  system  loses  the  advantage  of  dealing  directly 
with  the  individual,  and  the  second  objection  to  the  profit-sharing 
plan  is  introduced,  though  in  a  modified  degree,  as  a  small  group 

*  Attention  was  called  to  this  form  of  time  ticket  by  Professor  Hutton  in  Vol. 
IX.  of  the  Transactions,  page  386. 

f  This  rule  holds,  even  when  the  job  after  being  partly  finished  is  interrupted 
by  something  more  pressing.  In  such  a  case  the  ticket  is  taken  up  by  the  fore¬ 
man  in  order  to  insure  that  the  entries  have  been  made  for  the  completed  work. 
He  issues  the  ticket  again  when  the  work  is  resumed,  and  when  all  is  completed 
this  ticket  goes  to  the  office,  where  a  single  entry  in  the  cost  book  records  what, 
under  the  usual  method,  might  require  a  half  dozen  or  even  more  entries. 

49 


764 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


of  men  is  dealt  with  instead  of  the  entire  force.  The  remaining 
objections  to  the  profit-sharing  plan  are  not  introduced,  and  on 
such  work  the  plan  proposed  is  distinctly  superior,  though  lacking 
theoretical  perfection.  The  piece-work  plan  does  not  apply  to 
work  of  this  kind,  and  hence  there  can  be  no  comparison  between 
it  and  the  plan  under  discussion. 

On  contract  work  undertaken  for  the  first  time  the  method  is 
the  same,  except  that  the  premium  is  based  on  the  estimated  time 
for  the  execution  of  the  work. 

The  system  is  thus  applicable  to  all  classes  of  machine-shop 
work  except  “jobbing  ”  or  work  done  by  the  hour,  and  there  is  no 
very  vociferous  demand  from  the  shops  for  a  method  of  reducing 
the  time  on  that  class  of  work. 

The  writer  believes  that,  judiciously  administered,  the  plan  pro¬ 
posed  will  produce  a  larger  output  and  cheaper  work,  and  at  the 
same  time  pay  higher  wages  than  any  other  whatsoever. 

DISCUSSION. 

Mr .  John  T.  Hawkins. — In  this  paper  we  have  still  another 
attempt  to  protect — to  be  plain — unfair  workers  and  employers 
against  encroachments  upon  each  other’s  rights.  It  is  of  a  piece 
with  about  all  former  attempts  to  substitute  for  the  proper  spirit 
of  fair  dealing  between  man  and  man  in  the  two  capacities,  some¬ 
thing  which  shall  force  both  to  observe  what  the  whole  history 
of  this  question  shows  cannot  be  so  controlled. 

If  men  would  deal  justly  and  fairly  with  one  another  in  this 
matter,  it  is  self-evident  that  the  day’s- work,  or  better,  the  hour’s- 
work  plan,  is  the  ideal  one  ;  but  human  cupidity  on  both  sides 
interferes  with  its  proper  working,  and  the  only  remedy,  in  the  * 
writer’s  opinion,  is  to  be  found  in  some  system  of  educating 
employers  and  workmen  alike  up  to  the  fact  that  their  common 
interests  lie  solely  in  each  doing  to  the  other  what  he  would 
have  the  other  do  to  him.  But  with  such  an  observance  of  the 
golden  rule  would  come  the  millennium  ;  and  there  is  no  very 
imminent  prospect  of  great  possibilities  in  this  direction ;  nor 
will  there  be  more  than  is  brought  about  by  the  gradual  but 
sure  development  of  the  race  to  higher  ethical  planes,  unless 
some  organized  effort  is  made  to  school  both  sides  up  toward 
this  ideal. 

The  writer  fails  to  see  in  the  proposed  plan  any  surer  escape 
from  the  evils  of  the  time  in  the  relations  of  employer  and  work- 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


765 


man,  than  in  the  older  ones  which  the  author  of  the  paper 
mentions.  In  point  of  fact,  it  is  far  below  the  piece-work 
plan,  which  has  shown  itself  to  be  the  only  ameliorating  sys¬ 
tem  where  practicable. 

The  author  assumes  a  case  in  detail,  and  also  assumes  it  pos¬ 
sible,  in  this  case,  to  reduce  the  time  required  to  produce  a 
given  price  of  work  by  50$.  If  we  apply  this  to  an  average 
manufacture,  in  which  the  labor  constitutes  one-half  and  mate¬ 
rial  and  expenses  the  other  half  of  the  total  cost,  with  10$  profit 
to  the  employer  to  make  up  his  selling  price,  we  have  the  unex- 
istable  conditions  that  the  employer  will  thereafter  realize 
tabout  25$  profit  and  the  workman  obtain  33$  advance  of  wages 
On  its  face  this  looks  very  well  and  would  seem  to  deal  quite- 
fairly  between  the  two ;  but  the  true  state  of  the  case  is  that 
no  manufacturer  has  any  right  to  such  a  profit,  and  if  the  out¬ 
side  world  would  stand  it,  a  much  larger  part  of  the  saving 
should  accrue  to  the  workman,  whose  labor  produces  the  given 
article  ;  this  is  of  course  providing  we  are  prepared  to  condone  in 
the  workman  the  fact  that  he  was  capable  by  a  fair  day’s  work 
of  doing  double  what  he  actually  performed  under  an  agreed 
day’s  wages. 

But  there  are  others  deeply  interested  in  such  a  result 
What  of  the  consumer?  He  would  say  that  these  people  were’ 
getting  rich  at  his  expense  and  altogether  too  rapidly,  that  both 
were  in  a  fair  way  to  become  those  terrors  of  the  times,  “  robber 
barons ;  ”  and  he  looks  about  him  for  means  of  putting  a  little 
of  this  undue  enrichment,  of  this — as  he  would  probably  term 
it — monopolistic  combination  of  workman  and  employer,  into 
his  own  pocket ;  then,  appealing  to  the  cupidity  common  to  em¬ 
ployer  and  employee,  and  taking  counsel  of  his  own,  he  pro¬ 
ceeds  to  procure  the  starting  up  of  rival  concerns,  who  will  be 
satisfied  with  more  legitimately  low  profits,  and  who  would 
obtain  workmen  at  lower  pay  than  that  gotten  by  the  workmen 
in  the  aforesaid  combination,  and  thus  the  initial  wages  rate 
upon  which  10  cents  for  each  tenth  of  the  time  saved  is  ad¬ 
vanced  on  the  rate  of  premium,  and  the  25$  profit  of  the  manu¬ 
facturer  both  succumb  to  the  inexorable  laws  of  trade  and  man¬ 
ufacture. 

The  author,  in  discussing  the  piece-work  system,  shows  that 
when  the  workman  has  “  astonished  himself  and  all  others  by 
increasing  his  output  far  beyond  the  expected  25$, ”  and  “  his 


766 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


earnings  increase  with  startling  rapidity,”  “  while  the  cost  of  the 
work  remains  the  same,”  and  says  that  under  these  conditions 
the  employer,  in  cutting  the  prices,  practically  announces  to 
the  workman  that  “  his  earnings  will  not  be  allowed  to  exceed  a 
certain  amount,”  concludes  that  this  cutting  amounts  to  “  kiliing 
the  goose  which  lays  the  golden  egg.”  Nevertheless  this  gpose 
must  be  killed  in  any  event.  If  the  employer  doesn’t  kdl  it, 
the  consumer,  through  his  competitors,  will  not  only  kill  it, 
but  him.  The  fact  is  that  no  such  golden  eggs  are  to  be 
had  in  industrial  pursuits,  and  it  would  be  most  unrighteous 
that  they  should. 

As  the  writer  has  had  occasion  to  contend  in  a  previous  dis¬ 
cussion  of  this  subject :  If  a  workman  at  piece  work  succeeded 
in  producing  a  piece  of  work  in  one-half  the  length  of  time  he 
previously  employed  himself  upon  at  day  wages,  there  is  no  es¬ 
cape  from  the  fact  that,  when  working  by  the  day  he  was  not 
only  robbing  his  employer,  but  the  consumer  of  his  product  as 
well ;  and  it  is  to  the  credit  of  the  piece-work  system  that  it 
furnishes  the  means  of  discovering  such  a  state  of  things. 

The  piece-work  system,  in  the  writer’s  opinion,  furnishes  the 
only  relief  from  the  unsatisfactory  relations  between  employer 
and  workman  which  so  largely  obtain  under  the  day’s  wages 
plan  ;  while  the  older  and  still  prevalent  plan  of  paying  a  given 
sum  for  a  given  time,  with  a  quid  pro  quo  rendered,  is  that  which 
will  continue  to  prevail  and  improve — as  it,  of  all  the  proposed 
systems  only,  is  capable  of  improvement — as  men  themselves 
improve.  It  does  not  lie  either  in  profit  sharing  or  premium 
paying  to  ameliorate  the  regrettable  features  of  this  older  plan^ 
nor  can  any  such  amelioration  come  from  any  system  which' 
overlooks  the  iron  laws  of  supply  and  demand. 

In  all  the  systems  proposed,  and  in  the  newer  more  than  in 
the  original  day-wages  plan,  human  rapacity  or  cupidity  defeats 
itself  and  with  it  the  most  promising  of  these  new  systems, 
whether  it  exists  in  the  workman  or  employer  or  both;  and 
when  workmen  learn  that  their  interests  lie  in  doing  the  best 
they  can  for  an  agreed  compensation  by  the  day  or  hour,  and 
the  employer  similarly  is  persuaded  that  his  success  in  the  long 
run  depends  \ipon  his  paying  the  best  wages  that  the  market 
for  his  product  will  permit,  commensurate  with  a  fair  profit 
to  himself ;  paying  always  the  highest  wages  to  the  best  and 
most  efficient  workman,  as  a  proper  and  legitimate  incentive  to 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


767 


increased  effort  on  his  part,  we  will  have  as  nearly  the  ideal 
conditions  as  are  possible  in  any  industrial  system. 

Mr.  E.  F.  C.  Davis. — I  have  known  several  instances  where  the 
bonus  plan  was  adopted,  by  which  a  certain  amount  of  time  was 
arrived  at  as  being  customary  for  certain  work,  and  then  cards 
were  given  out  stating  that  half  of  the  time  saved  would  revert 
to  the  mechanic  and  half  to  the  shop  ;  and  that  established  what 
might  be  considered  a  minimum  amount  of  time  which  each  job 
would  be  likely  to  require  with  the  appliances  then  in  hand. 
Those  shops  which  are  doing  this  have  arrived  at  what  may  be 
considered  fair  piece-work  prices,  and,  after  using  the  premium 
plan  a  little  while,  have  dropped  it  as  being  too  cumbersome, 
and  come  down  to  the  simple  piece-work  plan.  But  by  start- 
ing  out  with  the  bonus  plan  first,  they  avoided  the  necessity  of 
such  extensive  cutting  and  have  gotten  at  fair  piece-work  prices 
by  the  bonus  system,  which  was  too  cumbersome  to  keep  up ; 
but  I  have  never  known  anybody  who  carried  out  Mr.  Halsey’s 
plan  for  any  great  length  of  time. 

Mr.  William  0.  Webber. — I  think  Mr.  Davis  has  rather  hit 
the  nail  on  the  head.  Success  in  using  the  piece-work  system 
results  largely  from  making  your  prices  right  in  the  first  place, 
and  I  think  that  can  be  easily  done  by  a  manager  who  thoroughly 
understands  his  business.  On  the  other  hand,  I  think  that 
Mr.  Hawkins  has  given  one  of  the  strongest  points  about  the 
whole  wage  problem,  and  that  is  the  willingness  between  both 
the  employer  and  the  employee  to  be  absolutely  fair  with  each 
other.  We  have  found  in  the  Erie  City  Iron  Works,  at  Erie, 
Pennsylvania,  that  treating  our  men  in  that  way  has  resulted  not 
only  to  their  advantage,  but  to  ours.  We  have  even  had  men  come 
to  us  and  say  that  the  piece-work  price  for  a  certain  piece  of 
work  was  too  much,  comparing  it  with  similar  pieces  of  a  differ¬ 
ent  size.  Now,  we  take  that  as  a  pointer,  and  if  we  find  that,  as 
in  many  cases,  the  prices  seem  high  for  a  certain  piece,  we  do 
not  see  anything  unfair  or  unbusiness-like  in  going  to  the  work¬ 
man  who  is  doing  that  work  and  suggesting  a  revision  of  those 
prices.  Sometimes  they  can  be  revised  with  good  reason.  We 
recently  had  a  workman  in  our  works  come  and  say  this.  We 
were  paying  him  a  certain  price  for  planing  cylinders.  He  said 
if  we  would  give  him  a  more  modern  planer,  he  would  plane 
those  pieces  for  20?£  less.  That  was  certainly  a  fair  proposition 
on  his  part,  and  we  immediately  took  it  up.  I  think  that  the 


76o 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


piece  work  system  is  the  only  one  which  will  ever  be  successful 
in  any  way,  and  to  make  it  a  success,  there  must  be  a  complete 
fairness  between  the  employer  and  the  employee,  and  the  mak¬ 
ing  of  prices  right  in  the  first  place,  which  any  man  who  under¬ 
stands  the  business  ought  to  know  how  to  do. 

Mr.  William  Kent. — I  regret  that  Mr.  Halsey  has  not  given  us 
actual  data  in  his  paper.  I  regret  still  more  that  Mr.  Hawkins 
has  presented  an  argument  which  is  altogether  a  priori  without 
any  facts,  except  those  drawn  from  experience  with  other  sys¬ 
tems  than  the  premium  system.  Mr.  Halsey  some  three  or  four 
years  ago  proposed  to  me  this  premium  plan,  and  I  fortunately 
was  then  in  a  position  to  put  it  in  practice  at  once,  and  it  has 
been  in  use  in  the  shops  of  the  Springer  Torsion  Balance  Com¬ 
pany  now  for  three  years,  with  satisfaction  to  both  employer  and 
employed.  I  heartily  endorse  the  plan  as  admirable  in  every 
respect.  It  has  given  no  trouble  at  all.  I  may  admit  with  one 
of  the  other  speakers  that  this  plan  may  result  finally  in  the 
piece-work  plan  pure  and  simple.  Whenever  experience  has  gone 
so  far  that  you  cannot  improve  the  method  of  manufacture,  and 
the  workman  has  got  into  a  rut,  then  the  amount  which  he  gets 
under  the  premium  plan  will  be  a  certain  amount  per  piece. 
You  might  just  as  well  in  that  case  pay  him  by  the  piece ;  but 
as  long  as  there  is  any  chance  of  improvement,  and  men  have 
not  reached  the  utmost  limit  of  their  skill  or  inventive  powers, 
so  long  will  the  premium  plan  be  a  good  incentive  to  the  work¬ 
men.  In  practice  under  the  working  of  this  premium  plan,  we 
have  perhaps  a  small  piece  of  machine  wTork  to  do,  and  we  have 
no  previous  experience  in  making  it,  but  we  put  a  boy  to  work 
upon  it,  and  find  that  by  his  ordinary  skill  in  attending  a 
machine,  doing  as  he  is  told,  he  turns  out  say  100  pieces  in  a 
day.  We  tell  him  that  there  may  be  some  quicker  way  of  doing 
that  work  if  he  can  find  it  out,  and  we  tell  him  we  will  give  him  a 
quarter  of  a  cent  premium  upon  every  piece  he  makes  over  100 
a  day.  Now,  we  have  had  the  number  of  pieces  turned  out 
jump  up  to  three  hundred  a  day,  and  that  simply  by  some  little 
knack  that  the  boy  discovered,  which  he  was  under  no  obliga¬ 
tion  to  discover,  and  which  he  had  no  incentive  (except  the  pre¬ 
mium)  to  discover ;  he  was  not  cheating  his  employer  by  not 
inventing  or  discovering  that  method  before,  but  when  wTe  gave 
him  an  incentive  to  try  and  discover  something,  why,  he  went  to 
work  and  he  succeeded  and  added  50^  to  his  wages.  This  is  an 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


769 


actual  case,  and  not  a  hypothetical  one.  So  I  close  as  I  began, 
by  saying  that  I  heartily  endorse  Mr.  Halsey’s  plan,  and  I  hope 
that  gentlemen  will  not  condemn  the  plan  unheard,  or  until 
they  have  more  data  as  to  its  actual  working. 

Mr.  Frank  H.  Ball. — I  am  very  glad  indeed  to  hear  what  Mr. 
Kent  has  said  on  this  subject.  I  recall — and  I  presume  other 
members  here  recall — a  paper  entitled  “  Gain- Sharing ,”  that 
was  read  at  the  Erie  meeting  by  our  ex-president,  Mr.  Towne, 
describing  a  method  very  similar  to  the  one  which  Mr.  Halsey 
proposes.  The  difference  between  the  two  plans  is  simply  this : 
In  the  plan  of  gain-sharing  which  Mr.  Towne  described,  the 
business  was  divided  into  departments,  and  the  men  in  each  of 
these  departments  were  given  a  share  in  whatever  they  would 
save  over  certain  fixed  prices.  For  instance,  in  a  foundry  they 
found  that  it  cost  a  certain  amount  per  ton  for  labor,  and  his 
plan  was  to  divide  with  the  men  what  they  would  save  over  this 
fixed  cost.  Mr.  Halsey  goes  one  step  further  and  brings  it  down 
to  the  men  individually.  The  argument  which  Mr.  Towne  made 
for  his  method  as  against  the  profit-sharing  plan,  was  substan¬ 
tially  the  same  as  Mr.  Halsey’s  argument,  and  he  gave  us  iG 
understand  that  the  results  were  very  satisfactory.  Mr.  Halsey 
proposes  to  deal  directly  with  each  man,  and  I  think  the  idea  is 
an  excellent  one.  It  seems  to  me  that  it  has  advantages  over  any 
other  system  that  has  been  proposed.  If  any  system  other  than 
day  wages  will  work  well,  it  seems  to  me  this  system  will. 

Mr.  H.  H.  Suplee. — The  gain-sharing  plan  has  been  in  use  at 
the  works  of  the  Yale  &  Towne  Manufacturing  Company,  Stam¬ 
ford,  and  both  parties  are  thoroughly  satisfied  with  its  opera¬ 
tion.  In  discussion  of  this  paper  with  Mr.  Towne — and  as  I 
think  he  would  have  discussed  it  himself  if  he  were  present— 
he  at  once  noticed  the  similarity  of  the  method  as  being  the 
gain-sharing  method  reduced  to  a  smaller  difference  of  sub¬ 
division — the  same  in  principle,  but  only  different  in  applica 
tion. 

Mr.  Henry  L.  Gantt. — I  think  Mr.  Kent’s  remarks  are  subject 
to  another  interpretation.  If  that  boy  using  the  same  tools 
could  by  a  little  knack  increase  the  product  300^,  it  seems  to  me 
that  either  the  foreman  was  careless  in  giving  him  directions,  or 
was  lacking  in  knowledge  ;  at  all  events,  something  was  wrong 
to  start  with,  and  the  problem  resolves  itself  into  the  original 
question  :  What  is  a  day’s  work  ? 


770 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


Mr.  Thos.  H.  Almond . — I  wish  to  call  to  the  attention  of  the 
members  something  that  was  stated  soon  after  Mr.  Towne’s 
paper  at  one  of  the  meetings  in  New  York.  A  gentleman  from 
Altoona  stated  a  case  which  came  under  his  immediate  observa¬ 
tion.  There  were  two  men  who  were  requested  to  do  their 
work  by  the  piece,  and  during  the  three  or  four  days  that  they 
were  doing  the  work  by  the  piece  one  of  them  went  to  the  fore¬ 
man  and  said,  “  I  cannot  make  day  pay  this  way,”  while  the 
other  man  said,  “  I  am  making  twice  as  much  as  I  was  by  the 
day.”  Now,  here  was  a  case  that  you  could  not  account  for  in 
any  way  excepting  as  stated  by  the  foreman  in  the  answer  he 
made  to  the  man  :  “  The  trouble  is  not  between  yourself  and 
me;  you  must  go  to  the  Creator.” 

Mr.  Hawkins. — I  am  prepared  to  admit  the  a  priori  character 
of  the  discussion  that  I  presented  (and  I  wrote  it  very  hastily 
and  with  a  view  of  simply  eliciting  discussion) ;  at  the  same  time, 
while  the  arguments  of  Mr.  Kent  and  Mr.  Suplee  seem  to  be 
conclusive,  from  the  fact  that  up  to  the  present  time  the  two 
systems  adopted  by  the  Springer  Balance  Company  and  the 
Yale  &  Towne  Company  “  have  been  successful,”  they  give  us 
no  measure  of  this  supposed  success,  and  I  contend  that  the 
time  is  entirely  too  short  within  which  they  have  been  put 
into  practice  to  settle  anything  in  the  question.  The  time 
will  come  with  both  those  concerns  when  they  will  be  ready  to 
drop  their  new  plans,  or  it  will  revert  practically  into  the  piece¬ 
work  or  day-wrork  system,  if  it  is  one  of  those  kinds  of  manu¬ 
facture  in  which  the  piece-work  plan  is  practicable.  Unfortu¬ 
nately,  in  the  machine  business  it  is  not  practicable  in  many 
places.  While  I  have  no  data,  I  venture  to  say  that  if  data 
-ould  be  obtained  from  piece-work  establishments,  the  work¬ 
ing  of  that  system  as  against  the  profit-sharing  or  the  pre¬ 
mium-paying  plan  would  be  shown  to  have  been  very  much 
more  successful.  I  can  point  to  an  establishment  as  long  ago  as 
from  1850  to  1860  where  they  established  the  piece-work  system 
and  expected  to  carry  it  out  thoroughly  in  all  departments,  but 
they  have  practically  dropped  even  this  plan  except  in  those  par¬ 
ticular  special  parts  of  the  machine  to  which  it  could  be  most 
practically  applied.  It  requires  a  long  time  to  settle  this  ques¬ 
tion  or  any  of  these  new  ideas  in  connection  with  labor,  and  I 
venture  to  say  that  they  will  all  finally  come  back  to  that  one 
idea :  that  they  must  learn  to  treat  one  another  right. 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


771 


Mr.  R.  Van  A.  Norris. — This  seems  to  be  very  much  like  the 
Pennsylvania  Bailroad’s  method  of  paying  the  engineers  and 
firemen  on  their  line  a  premium  on  coal  saved.  They  allow  a 
certain  quantity  of  coal  for  the  run,  and  then  they  pay  a  pre¬ 
mium  on  all  the  coal  that  is  saved.  A  plan  resulting  very  sim¬ 
ilarly  was  in  use  in  one  of  the  copper  mines  in  Michigan  some 
years  ago,  where  the  mining  was  found  to  be  very  expensive  and 
the  powder  bill  was  extremely  high.  The  amount  of  powder  used 
per  cubic  fathom  of  rock  by  each  miner  was  posted  on  a  bulletin 
board  each  month  and  a  prize  given  to  the  man  using  the  least. 
That  resulted  in  a  reduction  of  about  one-third  in  the  powder 
bill,  and,  as  all  work  was  done  by  contract,  the  result  was  a 
reduction  of  the  contract  prices  and  an  increase  in  the  amount 
of  money  made  by  the  men. 

Mr,  E,  F,  0,  Davis. — I  think  most  of  the  objections  raised 
against  piece  work  are  by  people  who  have  never  had  a  good 
opportunity  to  observe  how  it  works.  It  is  very  automatic  and 
self-regulating  in  its  workings.  If  one  man  is  making  too  much 
on  a  job,  and,  by  any  particular  appliance  is  making  very  much 
more  than  his  employer  thinks  he  ought  to  make,  there  are  ten 
chances  to  one  that  somebody  else  in  the  shop  will  notice  the 
money  he  is  making  and  will  come  forward  and  make  a  bid  to 
get  that  work  at  what  he  considers  a  fair  profit  for  himself.  So 
that  the  thing  works  all  the  time  to  the  benefit  of  both  parties. 
Whenever  any  new  appliance  is  put  to  work,  particularly  by  the 
foreman  or  the  employer,  no  reasonable  mechanic  ever  objects  to 
having  his  prices  changed  in  proportion.  I  think  that  the  fact 
of  the  matter  is  that  both  the  premium  plan  and  the  piece-work 
plan  come  down  to  very  much  the  same  thing.  So  far  as  my 
experience  has  gone,  I  think  that  people  who  have  tried  the 
premium  plan  have  generally  abandoned  it  and  adopted  the 
piece-work  plan,  as  being  a  simpler  way  of  getting  about 
the  same  thing.  The  piece-work  plan  makes  a  little  less  book¬ 
keeping. 

Mr.  James  McBride. — The  remarks  this  evening  have  pro¬ 
ceeded  entirely  upon  skilled  labor.  I  want  to  make  a  few 
remarks  about  unskilled  labor.  The  New  York  Dye  Wood 
Extract  and  Chemical  Company,  of  which  I  am  superintendent, 
employs  very  largely  unskilled  labor.  About  two  years  ago  the 
firm  decided  that  they  would  set  aside  a  portion  of  the  earnings 
of  the  concern  each  year,  to  be  divided  among  their  employees 


772 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


—not  committing  themselves  in  any  way  to  their  employees, 
but  simply  giving  to  them  a  certain  amount  of  money,  in  Jan¬ 
uary  each  year,  when  the  laboring  man  needs  it  more  than  at 
any  other  season,  all  in  a  lump  sum.  That  plan  was  adopted 
two  years  ago.  The  result,  while  not  altogether  satisfactory,  has 
been  a  great  improvement  to  the  old  system  of  simply  paying 
them  day’s  wages.  We  find  among  the  skilled  mechanics  that 
those  who  can  reason  to  a  conclusion  are  very  much  in  favor  of  it. 
Among  the  unskilled  laborers,  while  a  good  many  of  them  do  not 
exactly  comprehend  it,  they  think  a  good  deal  of  it,  so  much  so 
that  when  they  get  a  man  in  among  them  who  was  born  tired 
they  make  it  so  hot  for  him  that  he  is  glad  to  get  out.  Our  pay 
roll  has  decreased  in  some  departments  very  materially  from 
the  fact  that  a  good  man  refuses  to  work  alongside  of  a  poor 
man.  I  am  in  favor  of  some  method  by  which  a  portion  of  the 
earnings  can  be  divided  among  the  employees.  I  do  not  know 
what  is  the  best  plan.  We  adopted  this  plan,  as  we  thought  it 
the  best  for  our  purposes,  and  so  far  as  we  have  gone  with  it 
we  are  satisfied  it  has  been  an  improvement.  This  disturbed 
condition  of  labor  points  to  the  conclusion  that  manufacturers 
in  the  future,  in  order  to  pacify  their  workmen  and  keep  them 
quiet,  will  have  to  devise  some  means  by  which  the  workman 
can  become  a  sharer  in  some  way  with  his  employer. 

Prof.  G.  /.  Alden. — Will  the  gentleman  be  willing  to  state 
what  sum  unskilled  labor  received,  and  what  sum  skilled  labor 
received  of  this  division  of  profit  each  year  ? 

Mr,  McBride. — The  first  year  we  paid  the  common  laborers  5$ 
upon  the  amount  of  money  which  they  had  received  during  the 
year,  and  we  made  it  obligatory  that  the  men  should  be  prompt 
at  their  work  ;  if  they  lost  twenty  days  in  the  year,  this  per 
cent,  was  either  kept  from  them,  or  it  was  reduced.  We  gave  the 
skilled  laborers  10^  upon  the  amount  which  they  had  received 
during  the  year,  and  those  men  higher  up  received  a  little  more. 
The  first  year  every  man  received  a  percentage,  but  the  second 
year  we  were  obliged  to  make  a  discrimination,  and  those  who 
were  tardy  in  arriving  at  their  work,  instead  of  getting  5 %  got 
only  2J#,  and  the  skilled  men  got  5 ft  instead  of  10^.  The  result 
of  this  discrimination  has  been  that  those  men  who  have  been 
docked  have  since  been  very  regular  in  attendance  ;  they  have 
become  the  laughing-stock,  as  it  were,  of  their  fellow  workmen, 
and  they  have  tried  to  make  a  better  record. 


THE  PREMIUM  PLAN  OF  PAYING  FOR  L4BOR. 


773 


Mr.  William  H.  Weightman. — I  think  that  we  might  strike  at 
the  employers  on  this  question.  They  are  as  ambitious  for  a 
profit  as  the  employees.  My  dealings  have  been  more  with 
those  operating  shops,  and  I  have  found  that  I  can  save  50 $ 
by  calling  for  contract  prices,  over  what  it  would  cost  by  arrang¬ 
ing  to  pay  “  the  actual  cost  ”  with  a  certain  percentage  of  profit. 
I  had  the  same  party  do  two  similar  pieces  of  work.  The  first 
one  he  did  by  contract,  and  he  admitted  that  he  made  30$  profit. 
Some  six  months  after  that  I  had  a  similar  machine  made,  where 
there  was  a  possibility  of  having  to  alter  it,  and,  sooner  than 
have  any  trouble  in  regard  to  these  alterations  after  the  contract 
was  made,  I  told  the  party  to  keep  track  of  the  time  and  allow 
his  own  profit  afterward.  This  one  cost  us  three  times  as  much 
as  the  other,  in  spite  of  the  fact  that  we  found  there  was  no 
necessity  for  the  alteration.  So  that  of  the  two  machines,  one 
cost  $80,  the  other  cost  $150 ;  and  while  in  the  first  instance  he 
stated  (he  had  forgotten  the  admission  he  had  made)  that  he 
had  made  30$  at  $80,  in  the  other  he  stated  that  he  made  the 
exact  amount  that  the  30$  on  $80  was.  Thus  while  the  em¬ 
ployer  and  employee  can  hardly  trust  each  other,  sometimes 
the  employer  is  a  little  doubtful  himself  and  “the  golden  rule,” 
a  factor  all  around. 

Mr.  Hawkins. — In  1877  I  took  charge  of  a  machinery  establish¬ 
ment  in  the  city  of  Brooklyn,  and  carried  out  the  old  plan.  I 
did  not  know  a  single  one  of  the  workmen  in  the  whole  concern, 
but  I  called  them  all  together  and  I  talked  to  them  just  as  an 
employer  or  superintendent  should  talk  to  a  number  of  men, 
expecting  them  to  do  the  best  they  could.  I  gave  them  to 
understand  that  if  they  did  the  best  they  could,  due  considera¬ 
tion  would  be  given  them,  and  reward  to  those  who  did  the  best 
in  the  way  of  wages ;  and  a  dismissal  or  reduction  of  pay  of 
those  who  did  the  worst.  In  the  course  of  two  or  three  weeks 
I  found  it  necessary  to  discharge  half  a  dozen  men,  from  the 
fact  that  I  could  of  my  own  observation  see  that  the  work  which 
they  were  doing  was  being  “  nursed.”  I  discharged  them  as 
examples,  and  I  found  my  action  resulted  in  great  improve¬ 
ment  on  the  part  of  the  rest  of  the  men.  I  also  took  the  other 
course  and  raised  the  wages  of  the  men  who  were  doing  the 
best,  and  that  made  a  still  greater  improvement.  I  carried 
that  system  through  in  that  shop  so  long  as  the  shop  was 
carried  on,  and  I  think  with  a  great  deal  of  success  ;  and  I  will 


774 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


place  this  success  against  that  of  Mr.  Kent  and  Mr.  Suplee,  and  I 
venture  to  say  that  if  I  were  to  start  a  shop  to-morrow,  I  would 
adopt  that  course,  keeping  in  proper  touch  with  the  men,  and  I 
would  undersell  every  one  of  you  who  pay  these  premiums  or 
adopt  these  other  methods.  (Laughter  and  applause.) 

Having  undersold  you,  the  law  of  supply  and  demand  steps  in 
and  forces  you  to  modify  or  abandon  your  scheme  in  self- 
defence. 

The  great  trouble  with  all  these  proposed  systems  is,  that 
they  only  partially,  if  at  all,  discriminate  between  a  man’s  ability 
and  his  willingness  to  do.  The  old  system,  properly  adminis¬ 
tered,  enables  an  employer  to  reward  superior  ability,  with  as 
good  a  means  of  discriminating  against  idleness  or  unwilling¬ 
ness  ;  in  which,  of  course,  the  employer  is  called  upon  to  act 
fairly.  The  latter  rewards  a  man  in  proportion  to  his  ability, 
while  the  former  too  largely  offers  incentives  merely  to  perform 
what  was  the  man’s  obvious  duty  in  any  case.  “  Capital  and 
labor  could  get  on  well  enough  together  if  there  were  not  so 
many  men  trying  to  get  capital  without  labor.” 

Mr.  Daniel  Ashworth. — I  have  listened  very  attentively  to  these 
remarks.  The  difficulty  with  so  many  fine-spun  theories  and 
Utopian  ideas  such  as  we  have  heard,  is,  that  they  are  trying  to 
get  rid  of  one  important  factor,  and  that  is  the  force  of  circum¬ 
stances  from  the  commercial  side.  Mr.  Hawkins  touched  upon  a 
very  important  point,  when  he  spoke  about  carrying  out  a  cer¬ 
tain  scheme  to  undersell  his  competitors.  Now,  mark  you,  this 
is  one  of  the  turning  points.  I  know  it  from  teachings  of  expe¬ 
rience  among  many  branches  of  industry  in  the  United  States. 
Systems  have  been  developed  upon  this  question,  upon  which  a 
manufacturing  concern  would  step  forward  in  the  market  by 
some  process  of  distribution  of  the  pay,  in  the  shape  of  pre¬ 
miums  and  piece  work,  and  the  gentlemen  on  the  other  side 
would  immediately  figure  it  out  how  much  cheaper  they  could 
sell  these  goods,  and  eventually  they  would  invent  some  plan 
worse  than  before,  because  these  competitors  would  be  stirred 
up.  There  is  the  weak  point.  Cupidity  dominates  trade,  and 
it  is  a  constant  attempt  of  one  to  over-reach  the  other.  There  is 
the  figuring  in  the  office  very  elaborately,  and  it  is  presented  as 
an  ultimatum  to  the  employees,  “  that  we  propose  to  carry  out 
this  system,”  and  it  is  carried  out.  As  has  been  repeatedly  said, 
it  is  just  like  the  old  story  of  the  naval  distribution  of  prize 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


775 


money :  you  sift  it  on  a  ladder,  and  that  which  remains  on  the 
rungs  is  for  the  men,  and  that  which  falls  through  is  for  the 
officers. 

I  can  point  you  to  industries  in  the  Ohio  Valley,  which  for  the 
last  twenty  years  have  had  a  species  of  competition  beyond  a 
parallel  in  the  history  of  any  industries  in  the  world,  and  they 
have  been  going  right  along.  I  hey  have  been  indulging  in 
deception  upon  the  great  mass  of  their  intelligent  employees  ; 
they  said  there  was  no  money  in  the  business  at  all,  that  ruin 
was  staring  them  in  the  face,  and  yet  those  establishments  have 
been  increased  from  one  to  four  furnaces,  and  they  have 
branched  out  in  the  different  valleys  where  the  natural  fuel 
would  reach  them.  With  all  our  boasted  civilization,  we  ignore 
the  fact  that  these  workmen  are  becoming  more  and  more  intel¬ 
ligent  every  day.  When  you  will  take  the  intelligent  working 
masses  and  say  to  them,  “  Send  your  representative  to  us  whom 
you  see  fit  to  appoint  to  discuss  these  questions,”  then  you  will 
have  a  starting  point,  and  then  you  will  have  the  data  which  have 
been  so  much  talked  about  to-night.  And  right  there  I  wish  to 
say,  as  has  been  said  by  Mr.  Webber,  start  right.  When,  in 
God’s  name,  ever  was  the  time  that  the  manufacturer  had  the  right 
figure  ?  Why,  he  would  change  it  in  six  months.  (Laughter.) 

I  stand  here  to-night  to  champion  the  other  side  of  this  ques¬ 
tion,  because  I  know  I  am  in  the  minority,  and  yet  I  know  I  am 
right.  ,We  might  talk  until  the  crack  of  doom,  and  it  would  be 
one  man  trying  to  over-reach  the  others.  Intelligent  men,  such 
as  our  mechanics  are,  should  be,  and  they  are,  able  to  agree 
with  their  employers  upon  an  equitable  basis. 

Mr.  Thomas  R.  Almond. — A  case  has  come  under  my  notice 
to-day  which  illustrates  what  Mr.  Ashworth  says.  This  morning 
I  went  to  see  a  prominent  business  man  of  this  city,  who  said : 
“  I  have  never  met  you  before,  sir.  I  had  an  impression  that 
you  were  a  tall,  thin,  dried-up  kind  of  a  fellow  whom  I  didn’t 
wish  to  see ;  your  letters  to  me  were  so  peculiar,  your  prices 
were  always  so  stiff,  that  I  formed  an  opinion  of  you  that  was  far 
from  pleasant ;  but,  sir,  I  have  learned  to  like  your  way  of  doing 
business.”  And  he  added :  “  It  is  because  we  are  all  cutting- 
each  other’s  throats,  and  trying  to  get  each  other’s  business  that 
our  profits  are  10 $  instead  of  20 i  or  25$.  If  manufacturers 
would  all  keep  their  prices  so  that  we  could  rely  upon  them,  we. 
could  all  maintain  our  prices.”  I  take  it,  sir,  that  Mr.  Ashworth 


776 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


is  decidedly  correct.  I  said  to  my  foreman  four  years  ago  :  “  I 

want  yon  to  make  those  goods  and  fix  the  prices  yourself,  and  if 
these  are  satisfactory  to  me,  I  will  not  cut  them  as  long  as  you 
work  for  me,  and  the  market  prices  can  be  maintained.”  Since 
then  I  have  increased  his  prices.  I  do  not  wish  to  laud  my  own 
actions  in  any  sense,  but  I  do  believe  Mr.  Ashworth  is  correct 
every  time  when  he  says  that  the  manufacturers  and  the  dealers 
are  more  at  fault  than  the  workmen. 

Mr.  Weightman.—  These  experiences  always  result  in  four  or 
five  different  concerns  reducing  their  prices  until  they  get  to  the 
point  of  cutting  each  other’s  throats,  when  they  conclude  to 
form  a  trust,  binding  each  other  to  maintain  a  certain  fixed  price, 
by  means  of  which  they  are  safe  against  having  their  business 
ruined.  Instances  can  readily  be  cited  where  concerns  agree 
between  themselves  that  they  had  been  cutting  the  prices  down 
too  low  on  the  strength  of  this  style  of  competition,  using  em¬ 
ployees  as  assistants  in  reducing  the  prices,  until  the  concerns 
get  in  such  a  condition  that  they  are  not  doing  a  safe  business. 
They  immediately  conclude  to  form  some  plan  by  which  they 
can  control  each  other  and  keep  from  going  down  too  low.  A 
combination  is  formed,  an  agreement  signed,  and  they  work 
along  smoothly  with  moderate  safety.  The  employees  still  get 
their  profits.  The  result  is  a  slight  advance,  so  that  the  com¬ 
panies  as  well  as  the  employees  are  for  the  time  being  satisfied. 
If  you  can  get  employer  and  employee  to  trust  each  other  and 
to  believe  in  each  other  there  will  be  some  sort  of  an  under¬ 
standing  in,  though  hardly  a  definite  conclusion  to,  the  labor 
problem. 

Mr.  Robert  W.  Hunt. — During  a  somewhat  busy  life  I  have 
been  constantly  thrown  in  contact  with  labor  questions.  In  the 
great  development  of  the  Bessemer  business  we  had  constantly  to 
meet  new  conditions,  which  caused  all  of  us — both  the  men  and 
the  employers — considerable  trouble.  The  product  of  last  year 
would  be  a  ridiculous  amount  to  be  satisfied  with  this  year,  and 
yet  the  same  number  of  men  would  execute  the  work.  This 
because  inventive  genius  had  devised,  and  much  money  had 
been  expended  in  providing  mechanical  appliances  which  ren¬ 
dered  it  possible.  These  conditions  had  to  be  met  in  some  way. 
Certainly  under  such  conditions  the  men  ought  to  be  willing  to 
work  for  less  pay  per  ton,  while  still  earning  more  per  day.  I 
do  not  wish  to  detain  you  by  giving  reminiscences,  and  will  close 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


777 


by  saying  that  in  my  judgment  any  st  p  which  is  taken  in  good 
faith,  looking  toward  the  solution  of  this  labor  trouble,  is 
worthy  of  respectful  consideration ;  and  before  its  trial  it  is  dan¬ 
gerous  for  us  to  say  that  it  will  not  work.  If  any  gentleman  at 
the  head  of  an  establishment  is  willing  to  make  the  experiment, 
in  the  name  of  humanity  let  us  bid  him  God-speed.  Let  him 
try  it,  and  then  let  him  give  us  his  results,  and  thus  help  his 
neighbor  in  his  efforts  to  better  humanity,  and  his  own  interests. 
Undoubtedly  the  foundation  for  the  solution  of  these  difficulties 
is  the  relations  existing  between  the  employer  and  the  em¬ 
ployee.  If  a  manager  is  an  able  and  fair  man,  he  will  succeed 
much  more  easily  than  if  he  is  incompetent  and  unfair.  Un¬ 
fortunately  there  is  another  difficulty  which  has  to  be  constantly 
encountered,  and  that  is,  that  some  man  who  does  not  work  for 
you  will  come  in  and  be  supported  by  your  men  in  his  right  to 
assert  his  authority  to  discuss  with  you  your  relations  with  your 
employees.  I  think  that  this  is  the  most  serious  difficulty  any 
fair-minded  employer  has  to  meet. 

Mr.  Fred.  A.  Halsey*— It  is  all  very  well  to  say,  as  Mr.  Hawkins 
and  others  have  done,  that  the  true  solution  of  the  wages  prob¬ 
lem  is  for  men  to  deal  justly  with  one  another,  which  in  this 
connection  means  for  the  employee  to  exert  himself  to  the 
utmost,  and  for  the  employer  to  pay  as  high  wages  as  he  can 
afford.  Unfortunately,  however,  this  is  not  in  human  nature  ; 
and,  whatever  the  millennium  may  bring,  the  problem  before  the 
employers  of  to-day  is  to  deal  with  human  nature  as  it  is.  It  is 
a  truism  that  the  average  man  will  not  work  for  others  as  for 
himself,  and  the  average  employer  desires  to  get  his  product  as 
cheaply  as  possible.  This  may  seem  culpable  to  Mr.  Hawkins, 
but  to  the  writer  it  seems  natural,  just,  and  proper.  At  all 
events  it  is  inevitable,  and  it  is  the  purpose  of  the  premium 
plan  to  provide  for,  and  make  use  of,  these  features  of  human 
nature  by  giving  the  employee  an  opportunity  to  work  in  a 
measure  for  himself,  and  by  giving  the  employer  the  assurance 
of  a  more  than  proportionate  increase  of  product  from  a  given 
increase  of  wages. 

Mr.  Hawkins’s  objection  that  the  plan  involves  the  “  unexist- 
able  ”  condition  of  a  profit  of  25 and  that  the  manufacturer  has 
no  right  to  such  a  profit,  seems  to  me  irrelevant.  Such  arguments 
do  not  prevail  against  facts,  and  while,  of  course,  it  is  not  to  be 


*  Author’s  Closure. 


778 


THE  PREMIUM  PLAN  OF  PAYING  FOR  LABOR. 


expected  that  the  system  will  produce  a  general  increase  of 
output  of  100/,*  it  is  nevertheless  true  that  in  individual  opera¬ 
tions  that  figure  has  often  been  exceeded,  and  that  too  when 
such  foremanship  talent  as  was  available  had  not  discovered 
anything  wrong  with  previous  records. 

Mr.  Hawkins’s  third  objection,  that  rival  concerns  would  spring 
up,  and  by  avoiding  the  premiums,  produce  the  work  that  much 
cheaper,  is  based  upon  the  assumption  that  the  premiums  are  a 
charge  upon  production,  i.e.,  that  the  same  production  can  be 
had  without  as  with  them.  This  is  the  kernel  of  the  question, 
and  here  I  believe  Mr.  Hawkins  to  be  wholly  wrong.  He  here,  as, 
indeed,  all  along,  confounds  plans  based  on  the  profit-sharing 
principle,  viz.  :  the  division  of  a  percentage  of  the  profits  among 
the  employees  in  the  general  faith  that  the  promise  of  such  divi¬ 
sion  will  buy  their  good  will,  and  thereby  lead  them  to  increase 
their  product,  at  least  enough  to  make  up  the  amount  divided 
among  them,  but  ichich  amount  is  to  be  divided  whether  the  increase 
really  takes  place  or  not,  with  the  present  system  in  which  the  pre¬ 
miums  are  paid  only  in  case  of  actual  increase.  With  the  first 
system  the  increase  must  take  place,  or  the  cost  of  production 
is  raised,  but  with  the  second  system  this  is  impossible. 
There  could  be  no  better  place  to  try  the  question  to  a 
conclusion  than  such  a  shop  as  Mr.  Hawkins  proposes,  where 
the  day’s-work  method  is  employed  in  the  most  enlightened 
manner.  Mr.  Hawkins  may  find  a  few  men  (I  have  never 
found  one)  who  will  produce  as  much  on  the  day’s-wages 
method  as  when  offered  the  inducement  of  the  premium  plan ; 
but  that  is  not,  and  never  will  be,  the  case  with  an  entire  force, 
and  if  a  single  man  of  the  force  is  susceptible  to  such  induce¬ 
ment  the  plan  applied  to  him  will  cheapen  the  product.  If  it 
does  not  reduce  the  cost  there  will  be  no  premiums  to  pay.  The  fact 
is,  that  the  average  employer,  foreman,  or  workman  who  has 
seen  machine  tools  operated  only  on  the  day’s-work  system, 
does  not  know  what  they  are  capable  of  producing;  and  to  those 
who  have  seen  them  worked  under  systems  analogous  to  the 
one  proposed,  to  claim  that  as  good  results  can  be  obtained 
under  day’s-work  methods,  seems  absurd. 

*Tlie  table  on  page  759  is  given  merely  as  an  illustration  to  explain  the  work¬ 
ing  of  the  system.  There  is  nothing  about  it,  or  in  connection  with  it,  to  justify 
the  implication  that  the  last  line  of  the  table  represents  an  average  result 
to  be  expected  from  the  system. 


THE  PREMIUM  PLAN  OF  PAYING  FOR  L^BOR. 


779 


Turning  now  to  Mr.  Davis’s  remarks,  I  have  no  shadow  of 
doubt  that  his  workmen  could,  and  to  one  possessing  their  con 
fidence  would,  draw  a  very  different  picture  from  his  as  to  the 
“  automatic  ”  feature  of  piece  work.  Mr.  Davis  seems  to  have 
succeeded  in  getting  his  men  to  compete  with  one  another.  Few 
have  succeeded  in  this,  the  usual  reduction  in  the  piece  prices 
being  brought  about  by  a  direct  cut  by  the  employer.  However, 
the  results  are  the  same.  Each  workman  knows  that  if  he  push 
his  earnings  above  a  more  or  less  clearly  defined  limit,  some 
other  workman  will '  underbid  him,  and  he  would  be  foolish 
indeed  were  he  too  active.  When  men  know,  as  under  piece 
work  all  do  know,  that  their  earnings  will  not  be  allowed  to 
exceed  a  certain  limit,  it  is  idle  to  expect  them  to  exert  them¬ 
selves  to  pass  that  limit,  and  right  here  is  the  essential  differ¬ 
ence  between  the  piece-work  plan  and  the  one  under  discussion, 
which  some  seem  unable  to  see.  The  piece-work  plan  neces¬ 
sarily  sets  such  a  limit,  while  the  present  one  does  not.  As  to 
the  system  furnishing  a  mere  stepping  stone  to  the  piece-work 
plan,  its  case  is  exactly  analogous  to  a  mathematical  limit. 
When  improvement  can  go  no  further,  the  system  may  be  turned 
into  piece  work  ;  but  that,  like  a  mathematical  limit,  is  a  condi¬ 
tion  which  we  forever  approach  but  can  never  reach. 

As  the  system  proposed  has  excited  considerable  interest  I 
add  a  few  practical  hints  to  any  who  may  feel  disposed  to  give  it 
a  trial.  The  first  of  these  is  a  caution  against  expecting  the  work¬ 
men  to  receive  it  with  any  enthusiasm  ;  on  the  contrary,  they  will 
in  most  cases  look  upon  it  as  piece  work  in  disguise,  and  that  sys¬ 
tem  is  so  excessively  and  justly  unpopular,  that  they  will  at  first 
regard  the  present  plan  with  suspicion.  A  little  patience  on  the 
part  of  the  employer,  and  a  little  experience  on  the  part  of  the 
employee,  will  correct  this,  as  the  workmen  find  that  the  pre¬ 
miums  are  not  a  myth. 

It  has  been  pointed  out  in  the  body  of  the  paper,  that  the  sys¬ 
tem  enables  an  employer  to  deal  liberally  with  his  men.  At  the 
same  time  there  are  two  directions  which  this  liberality  can 
take.  One  method — and  the  wrong  one — is  to  take  the  best 
record  obtainable  as  a  base,  and  then  offer  a  liberal  premium 
for  its  reduction.  No  force  can  be  composed  entirely  of  “  stars,” 
and  if  the  above  plan  is  followed  it  will  be  but  a  question  of  a 
short  time  when  an  inferior  man  will  be  put  upon  that  job,  who 
will  soon  find  that  he  cannot  equal  the  base  rate,  and  he  will 
50 


780 


THE  PREMIUM  PLAN  OF  PAYING  FOE  LABOR. 


cease  trying.  At  the  same  time,  a  really  superior  man  on  the 
same  job  might  push  his  earnings  so  high,  in  consequence  of  the 
large  premium,  as  to  tempt  the  employer  to  the  fatal  step  of  cut¬ 
ting  down  the  premium.  To  meet  this  condition,  I  have  adopted 
the  settled  policy  of  being  liberal  with  the  time  rate  rather  than 
the  premium  rate,  thus  giving  all  a  chance,  and  keeping  the 
premiums  within  satisfactory  limits. 

Whatever  may  be  the  final  policy  in  this  particular,  the  system 
should  be  inaugurated  at  least  with  moderate  premiums,  since  if 
its  experimental  premiums  are  made  too  low,  no  one  can  object 
to  their  being  raised,  whereas,  should  they  be  too  high,  it  is 
another  matter  to  lower  them.  In  this  connection,  the  table  on 
page  759  was  intended  solely  as  an  illustration  of  the  principle 
of  the  system.  As  a  matter  of  fact,  a  premium  rate  such  as  is 
there  given  would  be  altogether  too  high  for  the  ordinary  run  of 
light  machine-shop  work,  while  for  other  and  more  laborious 
work,  it  might  be  altogether  too  low.  As  a  matter  of  fact,  I  have 
produced  excellent  results  with  premiums  as  low  as  three  cents 
an  hour. 

Finally,  it  is  but  just  to  himself  that  the  author  should  add 
that  this  method  has  been  in  no  way  suggested  by  Mr.  Towne’s 
excellent  gain-sharing  system.  In  point  of  fact,  the  present 
plan  was  clearly  formulated  before  the  publication  of  Mr. 
Towne’s  paper.  Its  publication  has  been  deferred  in  order  that 
it  might  first  receive  practical  trial,  and  be  presented  with  a  cor¬ 
responding  measure  of  assurance.  It  has  now  been  tried  in 
three  establishments,  and  in  each  case  with  results  such  as  have 
been  described. 


